Effective evaluation and control programs rely on a set of underlying behaviors promoting continuous performance improvement. While positionally dependent, these behaviors foster the continuous identification and resolution of performance improvement opportunities and shortfalls.
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Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
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Crisis management is so much more than handling of the media. A major oil company had a plant explosion and proceeded to do a good job of communicating afterwards. Unfortunately, the follow-through never transpired after the media coverage died down. Thus, lawsuits flew in the company’s face.
My client (a different chemical company) later had a similar explosion. The chief legal counsel called and stated that we did not want the fallout as from the other company. We therefore mounted a full-scope crisis management initiative that focused heavily on after-the-crisis help for the victims and their families. The goal was to keep litigation from occurring, which was met. At a later news conference, OSHA announced that it was assessing its smallest fine, as a result of the forthright way in which my client had handled the crisis.
Another energy industry client operated coal mines. The irresponsible actions of two employees thrust sludge from the mines and into the Cumberland River, which subsequently contaminated the water supply of three cities. The State of Kentucky filed suit, seeking criminal charges against the company.
Working closely together with legal counsel, our recommended crisis program posed an alternative to a worst-case sentence. The program, approved by the judge, consisted of TV and newspaper apology statements, plus the assurance that safety-environmental training would be provided to employees. An investment of $50,000 effected a reduction of the fine from $2 million to $500,000 and reduction of the charges from criminal to civil. Sustained follow-up communication with employees, customers, the court, regulators and opinion leaders ensued.
Another client was a large urban shopping center. Rapes occurred in the parking lot during the Christmas shopping season. Neighboring offices began e-mailing their friends, concerned that the center was unsafe.
Our strategy to address the crisis was three-fold. We engaged senior citizen volunteer corps and criminal justice students to wear Santa hats and serve as holiday escorts, assuring safety but not appearing as armed guards. Secondly, we initiated safety training that expanded to help home owners avoid accidents. Thirdly, the communications process served to glean research data that we needed to upgrade the center, its tenant mix and security issues. The common denominator was open communications with customers, where other retail centers try to stifle mention of incidents.
The process of strategy development is not esoteric. It is common sense, with an emphasis upon ideas that work and are easy to communicate. You always draw upon successful elements of other client crises. I had a restaurant chain attacked by an auto incident. Its family customer base was uneasy for their safety. We took the shopping center escort idea and translated it to senior citizen door greeters, armed with friendliness and the latest serving suggestions. Coupled with armed guards in parking lots, the approach was to reiterate the friendly, homey atmosphere, in contrast to the stereotype of sterile chain eateries.
There are three aspects to Crisis Management and Preparedness. First, qualified business advisors conduct Crisis Communications Audits. This securing and evaluation of programs needed or in-progress has enabled corporate management to make informed decisions, take swift action and avoid possible litigation.
Next comes Crisis Planning. This becomes a coordinated committee, with multiple departments and professional disciplines represented. What-if scenario planning is similar to the processes utilized in overall company strategic planning and visioning. The crisis plan must be part of the bigger process, not an adjunct or afterthought.
Finally comes Crisis Training. Activities include media-spokesperson training, field and operations staff training, coordination of corporate response and message points, community liaison, collateral materials writing-production, video archiving-production, media relations, monitoring and expert testimony. The crisis teams need to be prepared.
Crisis planning and strategies should be intertwined with security issues, financial goals, workforce empowerment and many other corporate dynamics. Elements which Crisis Management and Preparedness Plans should address, per categories on The Business TreeTM, include:
The business you’re in (core business). Protection of intellectual property, materials, business continuity and core business production information. Prevention of theft, leaks in proprietary information and delays in deliverables.
Running the business. Protection of physical plants, equipment, office files and other supplies. Prevention of unnecessary downtimes, spoilage, stoppage in processes and theft.
Financial. Protection of fiduciary responsibilities and financial assets. Prevention of theft, embezzlement, accounting fraud and overpayments.
People. Protection of human capital, knowledge bases of workers, executives, company safety and the work environment. Prevention of unnecessary employee burnout.
Business development. Protection of company reputation, partnerships and alliances, marketplace intelligence and customer interests and relationships. Prevention of leaks in customer information and losses in company market position.
Body of Knowledge. Protection of status and utilization of organizational working knowledge, management’s activities and relationships with regulators. Prevention of strains in company relationships with others and attacks from outside the organization.
The Big Picture. Protection of the overall organization, compliance standards in the organization. Prevention of loss in quality, purpose or vision.
In times of crisis, take assessment of damages, and investigate the truth. Never exaggerate, speculate, or withhold information. No statements should be “off the record.” Provide complete answers, and respond to media requests for additional information in a timely manner. Failure to return calls implies something to hide. Maintain accurate records of all inquiries and news coverage.
The best way to build bridges is to seek out community opinion leaders and stakeholders before times of crisis. Educate them of your activities. Offer tours or community visitations to facilities. Provide printed information on your business… and a video, if at all affordable.
Test crisis plans during simulated drills, using qualified outside strategic planning consultants to evaluate results. Company officials should take these simulations seriously. The military does, terming them “war games.”
Part of being prepared is being engaged in routine activity. Have a plan in force, and be sure that every employee has a copy. The binder containing the plan should include easy-to-read fact sheets and backgrounders on company operations, current phone numbers, and a delineated line of authority (from company resource people to the spokesperson)
Crises can have many liabilities upon companies, including loss of profits and market share. Inevitable spin-offs include government investigations, public scrutiny, and a tarnished image. This causes loss of employee morale and, as a result, company productivity.
Crisis management and preparedness can minimize negative impacts of any emergency. Going through the planning and implementation is a quality assurance process that strengthens any company. Crisis communications means banking goodwill for those times when the plan is called to the test.
Crises of one sort can and will happen to every company. They can be turned from disasters into opportunities to project corporate strengths. The manner in which a crisis is handled often wins praise for companies whose positions are improved in the public eye. Those who are prepared will survive and thrive.
Defining Moments in the Corporate Culture
Volatile business contractions, uneasy economic climate, plant explosions, health care crises, hostile corporate takeovers, governmental shakeups, and financial failings are crises that upset the routine of business life.
Some jolting incident puts every organization into a reaction mode. The consequences of miscommunication in a crisis can be devastating to all involved. By dealing with the unexpected, preferably before it occurs, companies can bank public goodwill that may be useful later. Playing catch-up means that you have lost the game.
It is the responsibility of corporate management to practice effective Crisis Management and Preparedness. Management must study practical experiences of what can go wrong, put a crisis team into place, understand the workings of news media, identify community opinion leaders, and predict potentially harmful or controversial situations. Learn from those who were successful, those who failed to achieve the desired effects, and those whose corporate credibilities were damaged by inaction or the wrong actions.
Power Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.
Hank’s latest book functions as a ‘PDR of business,’ a view of Big Picture strategies, methodologies and recommendations. This is a creative way of re-treading old knowledge to enable executives to master change rather than feel as they’re victims of it.
Power Stars to Light the Business Flameis now out in all three e-book formats: iTunes, Kindle, and Nook.
https://www.strategydriven.com/wp-content/uploads/HankMoore2.jpg333290Nathan Iveshttps://www.strategydriven.com/wp-content/uploads/SDELogo5-300x70-300x70.pngNathan Ives2013-10-25 06:17:282016-05-06 09:19:37The Big Picture of Business – Achieving the Best by Preparing for the Worst: Lessons Learned from High-Profile Crises, part 4 of 4
Crises can and will happen to good organizations. Most often (85% of the time), they can be heeded, planned for averted. There is an art to Crisis Preparedness. It must be included as part of a formal Strategic Planning and Visioning process. So also should diversity, branding, quality, marketing, re-engineering and other important processes. No single facet of planning should be done out of sync with the others.
There will also be those unplanned crises that nobody could have predicted. The same planning process that nurtures Crisis Preparedness can and must also accommodate for Crisis Management. Many of the elements of planning strategies can be taken off the shelf and implemented when extreme danger presents itself.
The City of New York had conducted planning for multiple contingencies. Having done so put the city in the position of responding to the unthinkable on September 11, 2001.
Some of those events that had profound impacts upon us recently are examined in this chapter. In this section are examples of crises that were handled well, thus increasing public trust and respect for their organizations.
Product Recall, Tylenol. Several deaths occurred as a result of tampered Tylenol capsules. The company’s swift recall of product from the shelves and the timely response of the company CEO were part of the crisis plan that was in place well ahead of the tragedy. Johnson & Johnson quickly put its crisis plan into action and subsequently drew good reviews for its open communication with the public.
Tylenol mobilized public support, with the company also positioned as the victim. Seeking to facilitate U.S. Food and Drug Administration approval of the tamper-proof caplet, a public awareness campaign was waged. The next phase in restoring public credibility to Tylenol was the reintroduction of new product to the shelves, done in such a way as to restore consumer confidence and increase market share. This is regarded as a premiere textbook case of quality crisis management.
Product Contamination-Damage. Unrelated cases but both well handled involved Perrier Water and the Girl Scouts of America. Ground substances in localized batches of Girl Scout Cookies were contained effectively, thus having no adverse effect on the organization’s fund raising activities. Contaminated quantities of liquid resulted in a worldwide recall of product. Activities included crisis communications, grassroots lobbying, dealer relations, issues management, and the recently-completed successful market reintroduction of the product. Perrier utilized media opportunities to advocate for environmental protection and sought to educate consumers about product purification processes.
Reclaim Company’s Good Name, Chrysler bankruptcy. Going to the government and asking for bailout loans is quite chancy, as the airlines have learned recently. Automaker Chrysler was at an impasse in the late 1970s, facing competition and marketplace dominance from imported autos. From top to bottom, the corporate culture was overhauled. Fresh approaches were taken to getting out of the hole, putting emphasis upon quality in workmanship and moving the company forward. When so many companies today put forward a “branding campaign” and call it a change in focus, I laugh. Chrysler was one of the few to totally rethink and retool. Their success should be a beacon to companies striving to make the long way back.
Rebuilding Through Stakeholder Coalitions
Saccharine. In 1977, the federal government banned saccharine, claiming that it caused cancer. Producers of the product teamed together to form the non-partisan Calorie Control Council of America. Its members included physicians, researchers, diabetes support groups and nutritionists. The coalition fostered healthy lifestyles, rather than attack the government bad directly. The national credibility restoration campaign included crisis management, re-educating the public on the need for artificial sweeteners as part of healthy diets and government relations activity. By organizing business groups with citizens into CCC, this effort coalesced grassroots support, which caused Congress to overturn a U.S. Food and Drug Administration ban on saccharine, thus restoring the product to the market. Research denying its link to cancer and other promotional health aspects of the campaign served to return saccharine to credible common usage and create a wider market share for its uses as artificial sweeteners.
Maquiladoras. In the early 1980s, Laredo, Texas, was faced with a 28% unemployment rate. Devaluation of the Mexican peso and slumps in energy and ranching economies had taken tolls on a city whose population was losing faith. The decision was made to unify the community and actively go after manufacturers to relocate to the area.
Maquiladora is a Spanish word which means “made by hand.” The program offered tax advantages to assembly line manufacturers who either left northern factories or added additional installations on the Mexican border.
This unified business community effort, in response to a dire economic crisis, resulted in 63 major factories being built in Laredo, Texas, and Nuevo Laredo, Mexico, occupied by General Motors, Ford, Sony, Hitachi, JVC, 3-M, Stokeley Foods and others. The Maquiladora program lowered the unemployment rate from 28% to 13%. This industrial development program carried the theme, “You Can Believe/Puede Creer.”
Columbine. Following shootings at Columbine High School, the City of Littleton, Colorado, was in the media spotlight. Still a relatively new community, its right hand and left hand still were not fully acquainted. Uniting to bravely face the tragedy, the community found inner strengths and mounted a visioning program. Infrastructures were put in place. Quality of life issues were addressed. Economic development and community stewardship programs emerged. Out of the ashes of a school massacre came a community that created and nurtured strategies for the future.
Anti-Defamation League. Following shootings at a Jewish community center in Los Angeles, California, the Anti-Defamation League of America came together and launched positive community educational initiatives. Random acts of violence are certainly threats to all, and the ADL built broad coalitions in order to sensitize, educate and further bond communities. Inspirational forces like that built by ADL and other groups are most effective when they add constituencies outside their normal scope, building consensus of opinion and the strength of wider resources.
Power Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.
Hank’s latest book functions as a ‘PDR of business,’ a view of Big Picture strategies, methodologies and recommendations. This is a creative way of re-treading old knowledge to enable executives to master change rather than feel as they’re victims of it.
Power Stars to Light the Business Flameis now out in all three e-book formats: iTunes, Kindle, and Nook.
https://www.strategydriven.com/wp-content/uploads/HankMoore2.jpg333290StrategyDrivenhttps://www.strategydriven.com/wp-content/uploads/SDELogo5-300x70-300x70.pngStrategyDriven2013-10-18 06:17:462016-05-06 09:21:42The Big Picture of Business – Achieving the Best by Preparing for the Worst: Lessons Learned from High-Profile Crises, part 3 of 4
With the upcoming release of Thor Dark World and amid the success of The Avengers blockbuster movies overall, there are excellent parallel leadership lessons that can be learned from these Marvel Comics superheroes. Namely, knowing when to take the reins and when to call on others for their specialized skills and expertise. Although, in business, we might not necessarily have to restore order to the universe and face unimaginable foes, we do often have to recalibrate our organizations, face strategic issues that seem impossible to solve, and combat pressure from the competition.
Movies like Thor Dark World and The Avengers actually have significant business value in their themes and characters. The plots, obstacles, and how each of the Avengers react can reflect what happens in business, and offers legitimate insight on how managers can handle challenging issues—better ensuring that proverbial good over evil prevails.
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With more than three decades of management, executive, consulting and speaking experience in markets all over the world, Miller Ingenuity CEO Steve Blue is a globally regarded business growth authority and ‘turnaround specialist’ who has transformed companies into industry giants and enthralled audiences with his dynamic keynotes. He may be reached at www.StevenLBlue.com.
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You would think that an Ivy League institution like Cornell University would be a model of the best practices of leadership throughout its organization since Cornell and most universities believe they are growing the next generation of leaders for our country and our world. Well… not necessarily and not always. While Cornell executive leadership can be exemplary, there were and still are times when units within this very large institution needed significant improvement. I was asked to lead a cultural turnaround in a large section of Cornell’s non-academic infrastructure. Over time, this intervention prevented lawsuits and arbitrations, increased customer satisfaction, increased revenues, reduced expenses, personnel problems, worker’s compensation claims, and turnover.
We chose to change our culture from a “top-down, my way or the highway” model to a values-based collaborative one. In any organization, what is rewarded and measured is what you will get. With a giant leap of faith, we invested in our leaders. We required every person who had supervisory responsibilities to attend a nine-day intensive training spread over three-four months.
Our leaders completed the program knowing, not guessing, what was expected of them, as leaders of their teams and as models for our entire organization. The experiential, highly interactive course included intensive exploration and training in 4 core Masteries: Personal Mastery, Interpersonal Mastery, Team Mastery and Culture and Systems Mastery.
They learned a great deal about their impact as a leader on everyone around them, a humbling experience for most. They learned and practiced how to communicate effectively and resolve conflicts, build teams to succeed, lead meetings that didn’t waste time, lead change that would stick, walk the talk with our organizational values, and finally how to engage and manage our talent. They also learned how they would be held accountable to our high standard of leadership behaviors. We began to measure performance for both business and behavioral results. That got everyone’s attention!
After three years of running our program, we had more than 200 leaders on board. We then required our entire staff to attend a week-long intensive program. This involved several more years and another 1,800 people, 60% of whom were union employees. We remained steadfastly committed to having all our staff from custodians, plumbers, and bus drivers to engineers, architects, and finance directors, trained in the culture we wanted to create and the culture we expected each of our people to honor.
Prior to the leadership intervention, our campus customers said we took too long and were too expensive. We also received powerful feedback that customers did not like working with us because of leader and staff attitudes. This of course directly correlated to our proposal win-rate of only about 40% of the bids in our facilities related departments. In reality, we were not any more expensive than others. Our real problem was we were not holding our leaders and staff accountable. High quality service was not a value before we started. We were a mediocre, at best, institutional operation with a sense of entitlement.
The results of our extensive experiment were nothing short of remarkable— and we found that positive, impactful leadership leads to great bottom line results. We managed university budget cuts with grace; we had far less turn over than the university as a whole and even lower than national averages for the same job categories.
Soon after the program was implemented, our internal customers started to notice. Our productivity grew each year and our facility bids were winning over 70% of the time. Because we were awarded more contracts and generated more revenue, we had a positive impact on the university and on our city. It is no accident that millions of dollars were saved because of one and only one intervention—teaching our leaders how to lead their people well in a solid values-based culture. More than 50% of our custodians had perfect attendance and we celebrated them. We received more applications than anywhere else on campus and became the ‘division of choice,’ where people wanted to work.
All of these stunning results were a direct result of the heightened quality of leadership throughout our entire organization. Our colleagues and customers could count on our people to do a great job, as promised, when promised, and with a good attitude—plain and simple.
During this time and over the next ten years, we experienced only two arbitrations, both of which we won. No lawsuits were filed against us by employees and we had very few Step 3 grievances from our four unions. Imagine this—the unions did not complain or file grievances even when their members were, like the leaders, required to receive an anonymous 360o feedback report on their impact in the workplace and required to attend training.
I co-conducted a professional peer review of a nearly identical campus on the west coast (size, structure, unions, facilities, budget, number of staff). They had no leadership or staff training in place, were not focused on customer service or accountability, and spent millions of dollars every year on arbitrations and employee law suits, most of which they lost. The only material differences between our campuses were geography and the quality of the leadership. Their leadership was measurably dysfunctional and ineffective; ours was functional and effective. We spent half a million dollars to train our people and restructure our reward systems over 10 years. They spent five times that on one lost lawsuit in one year.
We learned from our experience in culture change that having the ability to lead others to success does not happen by accident; it takes solid values, a long-term and deep commitment, alignment, accountability, and great leadership.
About the Author
Leadership authority Roxana (Roxi) Hewertson is a no-nonsense business veteran revered for her nuts-and-bolts, tell-it-like-it-is approach and practical, out-of-the-box insights that help both emerging and expert managers, executives and owners boost quantifiable job performance in various mission critical facets of business. Through AskRoxi.com, Roxi — “the Dear Abby of Leadership” — imparts invaluable free advice to managers and leaders at all levels, from the bullpen to the boardroom, to help them solve problems, become more effective and realize a higher measure of business and career success.
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Effective evaluation and control programs rely on a set of underlying behaviors promoting continuous performance improvement. While positionally dependent, these behaviors foster the continuous identification and resolution of performance improvement opportunities and shortfalls.
Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
Power Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.
With more than three decades of management, executive, consulting and speaking experience in markets all over the world, Miller Ingenuity CEO Steve Blue is a globally regarded business growth authority and ‘turnaround specialist’ who has transformed companies into industry giants and enthralled audiences with his dynamic keynotes. He may be reached at 
Leadership authority Roxana (Roxi) Hewertson is a no-nonsense business veteran revered for her nuts-and-bolts, tell-it-like-it-is approach and practical, out-of-the-box insights that help both emerging and expert managers, executives and owners boost quantifiable job performance in various mission critical facets of business. Through 
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